Monday, July 7, 2014

Investors react negatively to news that Datuk Seri Nazir Razak was stepping down as its group CEO. He will remain with the banking group but as non executive chairman come Sept 1 2014.

Nazir will relinquish his position as group CEO to become its non executive chairman from Sept 1 2014.

It is worth nothing that Nazir will also chair a soon to be established executive committee of the board, whose role is to focus on key strategic matters, such as deciding on potential acquisitions and setting policies, and enhancing the board’s oversight functions.

With the executive committee in place, all key strategic decisions will ultimately still go through Nazir. As such his actual involvement in the group would not be any lesser than before.

Market observers opine it is unlikely that the appointment of the new group CEO will rock the counter for now (July 2014).

Expectations also remain low for CIMB given the challenging macro environment in Indonesia which accounts for nearly 30% of the group earnings.

There will still be lingering concerns such as leadership, longer term direction and this could weigh on its share price.